Hungary's central bank cut its benchmark interest rate by 25 basis points to 5.5% on Tuesday, the third consecutive cut, as inflation fell to its lowest level in a decade. The move matched the forecasts of every economist surveyed by Bloomberg, and future decisions may depend on updated inflation projections.
The National Bank of Hungary reduced its benchmark interest rate by 25 basis points to 5.5% on Tuesday, marking the third consecutive cut as inflation dropped to its lowest level in a decade. The decision matched the expectations of all 20 economists surveyed by Bloomberg.
Inflation slows to a decade low
Inflation in Hungary slowed to 1.2% in July, the lowest rate since 2016. The central bank had projected average inflation of 1.8% for this year in June, down from a 3.8% forecast in March. Currency gains have reduced import prices.
Governor Mihaly Varga is scheduled to hold a briefing at 3 p.m., when an official statement will be released. Varga indicated in June that the central bank had room for three quarter-point reductions before reassessing the scope for additional easing at its September meeting, when quarterly inflation forecasts are due for release.
What comes next
Future monetary policy decisions may depend on updated inflation projections after energy prices remained high as initial optimism about a resolution to the US war on Iran diminished.
Source: Investing.com
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